When commitment isn’t a virtue

Could a different regional policy have changed the discussion over the BART Oakland Airport Connector? Image courtesy of BART.

Throughout the controversy over the Oakland Airport Connector that unfolded in 2009-2010, transit advocates opposing the project faced at least one disadvantage: The perception of nearly all local leaders with some measure of approval authority over the project — and in particular, commissioners on the Metropolitan Transportation Commission (MTC) approving the flow of funds — that the time to make substantial changes to the project had long since passed. A project to connect BART and Oakland Airport had been studied in some form for four decades; it had been environmentally cleared for nearly one decade; and BART emphasized repeatedly that the project was ready to spring into action once the requisite federal dollars were secured and a contract was awarded. In short, it appeared the perfect project for local officials interested in boosting their job-creation and project-delivery credentials during a recession, and after all, was that not the basic objective of the federal stimulus package? Even as some commissioners acknowledged that the Airport Connector’s escalating cost and dwindling list of benefits made it a less convincing investment than it might have once been, the majority articulated the view that the region had long since committed itself to completing the project, and that the determined pleas of transit advocates requesting a redesigned project were eleventh hour complaints that had come too late.

The fundamental recommendation made by advocates — that transportation projects be scrutinized for cost-effectiveness, even late in the game — was simply foreign to the process. Indeed, the identification of “committed” projects has been a consistent feature of regional decision-making, and it is generally expected that once a project is deemed to be committed, it will eventually be built once funding becomes available. When MTC updates the Regional Transportation Plan (RTP), it examines alternative ways that the agency could invest discretionary funds while assuming that the core base of committed projects will be built.

Longtime readers of Transbay Blog may recall that in 2008, when the current version of the RTP was being developed, I argued that if MTC was serious about reducing vehicle emissions, it should assume a continuing responsibility for ensuring that regional dollars are invested wisely — by reopening the “committed” status lockbox and scrutinizing for desirability and cost-effectiveness both outdated freeway expansion projects and large transit projects that were likely to under-perform relative to their price tags. Later that year, Jerry Brown, in his capacity at the time as Attorney General, conveyed to MTC an opinion letter adopting the same position. Brown urged MTC to properly analyze the impacts not just of discretionary spending, but also the committed projects, and to consider shifting funds away from those committed projects that “support only one, in some cases none, of the identified performance goals.” Particularly because many of those committed projects were included in previous iterations of the RTP and were conceived of long before the passage of Assembly Bill 32, the 2009 RTP update presented an opportunity for the Bay Area to be proactive in meeting the challenge posed by climate change, even if that meant postponing or canceling projects that were once assumed to be foregone conclusions.

Defining a New Regional Policy

MTC is now finally poised to take a promising step forward by defining a new regional policy for “committed” funds and projects. This policy would be incorporated into the upcoming RTP, which MTC will release in 2013 with the Bay Area’s first SB 375 Sustainable Communities Strategy. The two-part policy addresses both what categories of funding the agency considers to be committed, as well as what projects would be designated as committed.

MTC’s new proposed definition for committed funds essentially doubles the amount of money over which the Commission has discretion, while correctly recognizing that certain types of funding have strings attached. MTC cannot, for instance, shift locally generated sales tax revenue toward a project in another area.

As for projects: MTC is weighing two options for determining when a transportation project should be designated as “committed” in the next RTP. Under Option 1, a project would be considered committed if it is environmentally cleared by May 1, 2011 and is fully funded. Under Option 2, a project would have to be further along in the development process; in addition to being fully funded, the project must have actually commenced construction (e.g. utility relocation) by May 1 to be considered committed. A greater number of projects fall short of being “committed” under either Option 1 or 2 as compared to the current policy. Of 70 committed projects in the current RTP, 36 would have been committed under Option 1, and just 14 of the 70 would have been committed under Option 2. The Oakland Airport Connector, for instance, was committed under the RTP and would also have been committed under Option 1, but it would not have been committed under Option 2.

What is the significance of the “committed” designation? Committed projects will be included in the RTP, whereas uncommitted projects could be included, but only after getting a discretionary thumbs up from the Commission. Uncommitted projects would be subject to a performance assessment, which scrutinizes any increases in project cost and evaluates whether the project meets identified objectives. After reviewing the assessment, the Commission would decide whether or not the project should be included in the RTP. Neither Option 1 nor Option 2 forces the Commission to, for instance, kill all projects that are experiencing cost overruns. The value of the new policy is that the Commission would be obliged to take a fresh look at even old projects, weigh the costs against the benefits, and then, based on up-to-date information, decide if those projects are still worthy investments.

Both Option 1 and Option 2 increase MTC’s flexibility compared to the current policy by moving the designation of “committed” status to a later stage in the project development process. Option 2 presents greater risk for project sponsors than Option 1 — in that a substantial amount of money might be invested upfront to prepare an EIR or acquire right-of-way, only to be lost if MTC later decides not to fund the project.

Despite that drawback, I believe Option 2 to be the better choice because it captures a greater portion of the project development timeline than Option 1. Option 2 requires that the Commission take a close look at more projects, including any noteworthy changes that may have occurred since environmental clearance. If significant funds were expended on environmental work and ROW acquisition, the Commission would almost certainly take that into account when evaluating the project.

Policy Awaits Full Commission Vote

I am happy to report that last week, the MTC Planning Committee approved Option 2. This vote was in part ushered in by new additions to the Commission that serve on this committee and demonstrated greater open-mindedness than some of the old guard. The committed funds/projects policy will next be heard by the full Commission on April 27, 2011. The Planning Committee’s recommendation is not binding, and the full Commission could still elect to revive Option 1 or craft a hybrid of the two.

But it is my hope that the Commission will approve Option 2. MTC, for the first time, will prepare a Sustainable Communities Strategy in the 2013 RTP that aims to achieve targets for reducing greenhouse gas emissions from vehicles: 7 percent per capita by 2020 and 15 percent per capita by 2035. Since the passage of Senate Bill 375, it should no longer be sufficient to explain vaguely why a particular transportation project might satisfy broad, nebulous objectives. The Bay Area must strive to achieve a specific numeric target, and whether a project is helpful or counterproductive in this regard should carry significant weight, particularly at a time when funding is scarce. The region will have a better chance of success if there is more flexibility to program funding for projects that reduce vehicle miles traveled, and Option 2 would help provide that additional flexibility.

Would you say the one downside to this policy is that projects might take longer to get built? They would have to go through another up/down vote and more scrutiny by planners. Plus, it adds a certain amount of uncertainty for those who would build the project.

That said, still a good policy since planners always tend to underestimate costs in the preliminary stages.